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Rules of Origin as Commercial Policy Instruments
Abstract
This article examines the role of rules of origin as a commercial policy instrument that targets the input composition of imports. Using a three-country, partial equilibrium structure, we demonstrate conditions under which the imposition of a binding rule will be welfare improving for an importer facing competitive export suppliers. We further show that employing rules of origin in this way would be complementary to, rather than a substitute for, conventional optimal tariffs. Copyright Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association
... Krishna, 2006). There is always a possibility to tweak RoOs or delay the approval process in response to lobby group pressure to undermine the expected trade opening under an FTA (Falvey & Reed, 2002). Because of these reasons, how the RoOs are designed and implemented matter a lot for understanding how much market access an FTA really confers. ...
... The proponents of FTAs may ask why countries are so enthusiastic in signing FTAs if the actual trade flow effect is very low. This issue has been well addressed in the recent literature on FTAs (Cattaneo, 2009;Irwin, 2008;Krishna, 2014;Rodrik, 2018a). First, countries sign FTAs as much for foreign policy and security reasons as for economic reasons. ...
Over the past three decades, free trade agreements (FTAs) have become an integral and enduring part of the global trading system. The number of FTAs notified to the World Trade Organization increased from 19 in 1990 to 292 by January 2019. ¹ However, debate on the economic case for following the FTA path as an alternative to multilateral and unilateral trade liberalisation is far from settled. The purpose of this note is to assess key themes of this policy debate. The focus is solely on the economic rationale of FTAs, even though political considerations play a key role in the proliferation of FTAs.
JEL Codes: F13, F15, F55
... For further analysis of rules of origin of FTAs and their welfare effects on developing countries, see Ju and Krishna 1996). Also, Falvey and Reed (1997) assess the equivalence of rules of origin and commercial policy instruments. ...
... The U.S.-Jordan FTA rules of origin refer to domestic content and substantial transformation of products.19 Though the rules of origin have been criticized for their protectionist effects, especially byKrueger (1999), they can lead to an improvement in efficiency by reversing the trade-diverting effect of a tariff preference on the final good.Falvey and Reed (1997) andJu and Krishna (1996) offer further discussion of the analytic aspects of the rules of origin. ...
Assesses the U.S.–Jordan FTA and assess its impact on trade in goods and services of the Hashemite Kingdom of Jordan (Jordan), with a view to examining the following specific areas: (a) The comparative advantage of Jordan in exports of goods and services to the U.S. market, relative to other countries in the Middle East region; (b) the effect of FTA-related tariffs, rules of origin, and other market access conditions on Jordanian exporting companies; (c) the impact of the FTA on the bilateral trade in services between Jordan and the United States.
... 2 For example, Vermulst and Waer (1990), Krueger (1993), Bhagwati et al. (1999), Falvey and Reed (2002), Estevadeordal and Suominen (2004), James (2005) and Krishna (2005) 3 A number of FTAs jumped from less than 50 agreements in 1995 to almost 200 agreements by (Economist, 2006. Even though this phenomenon fundamentally alters the world trade landscape, empirical evidence how private businesses respond to FTAs are sparse. ...
... RoO tend to divert across bilateral agreements even within given hub-and-spoke systems. Since RoO are usually negotiated on the industry-by-industry basic and each country tends to design its own RoO, there is enormous scope for well organized industries to essentially insulate themselves from the liberalization effects of the FTA by devising suitable RoO (Krueger,1993;Bhagwati et al.,1999;Falvey and Reed, 2002;Estevadeordal and Suominen, 2004;Krishna,2005). The increased complication of RoO is referred to as Spaghetti Bowl Effect. ...
This paper examines the effect of FTA export creation on the Thai manufacturing sector in which rules of origin (RoO) are well taken into consideration. Thailand is selected because there were several FTAs that have entered in force for since 2005. The methodology in this paper is unique from the existing literature, combining between quantitative and qualitative analyses. Key findings are Thailand entered a race of maximizing bilateral FTAs as a consequence of the fear of exclusion. Nevertheless, it seems that such fear was overstated. Whilst North-South FTAs provided a narrow margin of tariff preference, South-South FTAs are usually involved with long lists of exceptions and long transition periods. We found the negative relationship between ability to comply with RoO and export-market orientation, implying FTA export creation seems to be very limited and concentrate on a certain group of manufactured goods especially completely-built-up (CBU) vehicles. This is consistent with the low FTA utilization in 2005, averaging out at 38.7 per cent in 2005. Based on the firm interview evidence, all car assemblers which extensively utilized preferential export had positive attitudes toward the existing FTAs, but they agree that FTA export creation toward the industry was not significant. Therefore, evidence from Thai manufacturing provides a case against FTA-led liberalization. Being in a race of maximizing FTAs would not necessarily create the considerable FTA export creation but certainly jeopardized multilateralism. . Paper prepared for Globalization and Regional Economic Development Conference, held in Korea (December 15-16, 2006).
... First the significant reductions in customs duties, and non-tariff barriers achieved under the auspices of the GATT and then WTO have brought to the fore the importance of other instruments of trade policy. This applies both to the use of restrictive rules of origin as a direct form of protection, but also indirectly where the absence of origin has been used to justify the use of anti-dumping duties [Vermulst (1992), Flatters & Kirk (2003)]. Second, the multiplication of, frequently overlapping, preferential trade agreements each of which with its own and differing rules of origin has highlighted the possible distortions created by those rules and of the incompatibilities between them 3 . ...
... In the EU context they are determined at the HS 6-digit level which hence covers 5142 products. The rules may therefore serve to protect certain sectors from the degree of liberalisation that might otherwise be implied by the free trade agreement, and in particular from competition from low-wage countries (see eg. Brenton & Machin (2002), Falvey & Reed (2002), Burfisher, Robinson & Thierfelder (2001), Hoekman (93)). Where industrial lobbies play an important role they can then influence the viability and nature of trade agreements (Dasgupta & Panagariya (2002), Grossman & Helpman (1995). ...
... The dummy variable is measured by the effective tariff margin, the gap between most-favored-nation (MFN) tariff and its corresponding FTA preferential rate, adjusted by the cost incurred to firms in compiling with the rules of origin. As argued in many studies e.g. , Cadot et al. (2002); Estevadeodal and Suominen (2004); and Falvey and Reed (2002) complying with rules of origin is costly instead of costless. Being deflated by MFN tariff rates makes our results more accurate as opposed to other studies using the traditional zero-one dummy variable. ...
This paper examines the trade enhancing effect from FTA, using Thailand as a case study. A gravity equation model, the popular trade model workhorse, is applied during the period between 1991 and 2010 with allowing export and import to perform differently to the preferential trade scheme. The novel feature of the paper is that actual tariff margin, the gap between MFN and preferential-FTA rates, is calculated to measure the effect from FTAs, instead of using zero-one dummy variable. In addition, the estimate of costs in complying rules of origin is included in the calculation. Also, Products are further disaggregated into manufacturing and machinery and transport equipment (SITC 7) to examine possible different impact of FTAs. Our key finding is how to measure FTA effect matters to the outcome. Zero-one dummy variable tends to overestimate trade enhancing effect. In addition, products under production network dominated by parts and components are less likely to utilize preferential trade scheme due to the already low tariff margin. Our result raises the policy awareness in maximizing a number of FTAs. Rather its trade enhancing effect depends on FTA partners and the nature of bilateral trade between them.
... See, among others,Krueger (1993);Lloyd (1993);Krueger (1995);Krishna and Krueger (1995);Lopez-de Silanes et al. (1996);Falvey and Reed (2002);Carrère and de Melo (2004);Krishna (2005);Thoening and Verdier (2006);Cadot, et al. (2006);Georges (2008a;2008b;. ...
This paper analyses the trade policy options of Canada under Trump and reviews some arguments that have been made by economists and others in the current debate surrounding U.S. return to protectionism and mercantilism. For Canada, both imports and exports are vital, and trade with the U.S. and with the rest of the world is of key importance. The new mercantilist position of the U.S. administration under Trump requires Canada to reflect on how to communicate the Canada-U.S. trade relation in terms of win-win strategies. A good starting point for this exercise, however, is to emphasize that NAFTA, as a trade preferential arrangement, is not as valuable as it used to be in the 1990s because NAFTA margins of preferences are no more sufficiently attractive to offset the cost of complying with NAFTA Rules of Origins requirements. Second, Canada-U.S. border security measures introduced after the terrorist attacks of 2001 have also offset NAFTA’s tariff preferences. Finally, the paper discusses the benefits of diversifying Canada’s trade geographically in a world where North America has become a smaller share of the global pie.
... In addition, Jha (2010) also provide explicit empirical evidence that rules of origin work as trade restrictive measure even in the South-South trade such as the India-Sri Lanka free trade agreement. Moreover, Falvey and Reed (2002) provided solid theoretical evidence that rules of origin works as restrictive trade measures in an oligopoly model showing that rules of origin are complementary, rather than s substitute for, conventional optimal tariffs. In addition, Abreu (2013), based on an ...
Purpose
– Rules of origin (ROOs) are often cited as major trade barriers even after tariff barriers are removed with the formation of preferential trade agreement (PTA) as shown in a survey result that a large number South Korean firms in the textile industry give up utilizing tariff-free exports to the USA after the bilateral Free Trade Agreement (FTA) due to ROOs. The purpose of this paper is to examine the impact of ROOs on the equilibrium FTA regime and the welfare effects.
Design/methodology/approach
– The authors determine the impact of ROOs on the equilibrium FTA regime based on an oligopolistic model where there are asymmetry in production technologies of intermediate goods and the capacity of outsourcing intermediate goods.
Findings
– The authors demonstrate that ROOs are used as a protective trade policy against the FTA member country with an outsourcing option for technologically dominant intermediate goods.
Practical implications
– The non-cooperative features of ROOs found in this paper necessitates the introduction of an international coordination mechanism to avoid the prisoners’ dilemma-type implementation of ROOs.
Originality/value
– This paper provides a theoretical frame to analyze the protective effects of ROOs under PTAs.
... In the EU context they are determined at the HS 6-digit level which hence covers 5142 products. There is increasing evidence to suggest that the rules may serve to protect certain sectors from the degree of liberalisation that might otherwise be implied by the free trade agreement, and in particular from competition from low-wage countries (Brenton & Machin (2002), Falvey & Reed (2002), Burfisher, Robinson & Thierfelder (2001, Hoekman (93)). For example, in the context of EU agreements it is typically the case for textile imports that the change in tariff classification rule is employed. ...
... ≤ 16 In practice, there are three main forms that a ROO may take (see Falvey and Reed (1997))(i) Substantial transformation: the input imported by a member from outside must undergo substantial change in terms of name, character or use to qualify for duty-free access into another member's market, (ii) change in the tariff heading: the commodity, assembled from parts originating outside the union, must undergo a classification change in the tariff line, and (iii) value-added test: a minimum percentage of value added must have withinunion origin. The ROOs based on transformation or tariff classification requirements involve discrete changes that are not readily handled by differential calculus unless one works with a model with a continuum of production stages. ...
Incorporating intermediate inputs into a small-union general-equilibrium model, we develop the welfare economics of preferential trading under the rules of origin. Combining this analysis with the Grossman-Helpman political-economy model, we demonstrate that the rules of origin can improve the political viability of FTAs. Two interesting outcomes are derived. First, an FTA that lowers joint welfare of the union and is rejected in the absence of the rules of origin may become feasible in the presence of these rules. Second, an FTA that increases joint welfare of the union but is rejected in the absence of the rules of origin may be endorsed in the presence of these rules, but it may also become welfare inferior relative to the status quo.
... Three different definitions of ROO are found in the existing literature on FTAs with ROO that focuses on the issue of LCR. These are the cost-(or price-) based definition (Ju and Krishna, 2005), value addition-based definition (Krueger, 1999;Falvey and Reed, 2002), and physical content-based definition (Lopez-de-Silanes et al., 1996). Krishna and Krueger (1995) compared the results of the cost-based definition with that of the price-based definition. ...
This paper presents a model of a free trade area (FTA) with rules of origin (ROO) under an oligopolistic final goods market. Following the existing literature, we also consider ROO to serve as a protectionist device and mainly focus on the interaction between ROO and the subsidy policy. A paradoxical result is considered: if the government of the final goods exporter within the FTA is the first mover, it chooses export tax. Furthermore, we show that the profit of a firm located in the FTA increases due to a reduction in the external tariff.
... For example, the tariff preferences in favor of NAFTA countries might distort the input choices of firms from a low cost non-NAFTA source to a high cost NAFTA source, leading to production inefficiencies. In 20 Methods used in determining "origin": Governments in practice apply three main methods of determining when imports are not to be granted national treatment and conditions under which it will be considered as originating in a preference receiving country (Falvey and Reed 2002). ...
In this paper we analyze the implication of a possible Canada-U.S. customs union on trade flows, real output and investment both at the aggregate and industry levels in Canada, using a multi- sector, multi-region dynamic computable general equilibrium model. The model is calibrated to the GTAP Database (version 5, 1997). Our scenario for a possible Customs Union with the U.S. assumes the harmonization of Canadian and U.S. tariffs against the non-NAFTA countries (common external tariffs) as well as the elimination of the Rules of origin provisions of the NAFTA. Our simulation results suggest that the overall economic gain to Canada from a Customs Union between Canada and the U.S. could be as much as 1% of GDP. Canada's trade could expand by almost 20 %. American trade also increases significantly, but at a slower pace than that of Canada. Much of the increase in trade flows and GDP are the result of the elimination of the Rules of origin provisions. All Canadian industries, except food and beverages, gain from a Canada-U.S. Customs Union. The big beneficiaries are transportation equipment, electronics, and machinery and equipment. Services and resource-based industries gain the least.
... 6 The exceptions are WTO (2002), Estevadeordal and Suominen (2003), Estevadeordal and Suominen (2004a), and Suominen (2004a). 7 See Krueger (1993); Krishna and Krueger (1995); Jensen-Moran (1996); Garay and Estevadeordal (1996); Stephenson (1996); Scollay (1996); Ju and Krishna (1998); Appiah (1999); Falvey and Reed (2000); Estevadeordal (2000); Duttagupta (2000); Duttagupta and Panagariya (2001); Lloyd (1996); Rodriguez (2001); Augier and Gasiorek (2002); Brenton and Manchin (2002); Cadot et al. (2002); Flatters (2002); Garay and Cornejo (2002); Hirsch (2002); Krishna (2002); Estevadeordal and Miller (2002); Estevadeordal and Suominen (2003, 2004abc); Suominen (2004abc); and contributions in Cadot et al. (2004)It is the task of this paper to foster the understanding of the universe of RoO regimes and the global trade effects of RoO. In particular, we strive to (1) provide an overview of the types of RoO used around the world; (2) present a comparative analysis of the preferential RoO regimes in some of the main PTAs in Europe, the Americas, Asia-Pacific, Africa, and the Middle East; (3) measure the degree of restrictiveness and selectivity of product-specific RoO employed in the various RoO regimes; (4) put forth a facilitation index to capture the extent of flexibility instilled in RoO regimes by various regime-wide RoO; and (5) empirically assess the effects of RoO on aggregate trade flows as well as trade on intermediate goods in five major economic sectors—chemicals, machinery, textile, television and radio transmitters, and vehicles—through a modified gravity model. ...
... Stringent RoO can compel intra-FTA firms with low-cost extra-FTA supply sources to turn to higher-cost inputs produced within the FTA in order to qualify for the PTA-conferred preferential treatment for their final products, particularly in sectors where preferential margins are wide. As such, RoO liken a tariff on the intermediate product levied by the importing country (Falvey and Reed 2000; Lloyd 2001), and can be used by one PTA member to secure its PTA partners' input markets for the exports of its own intermediate products (Krueger 1993; Krishna and Krueger 1995). In an en econometric study of the determinants of the restrictiveness of the RoO in the North American Free Trade Agreement (NAFTA), Estevadeordal (2000) shows that the same political economy factors that drive tariff protection also drive RoO. ...
In 2021, an artificial intelligence system wrote a law article. The results were far from perfect but begged the question of whether a human author will still be able to compete against artificial intelligence. Leaving aside the Luddites scenario, this paper starts with the premise that human-made art might be more valued than machine-enabled art. However, to be properly valued, machine-enabled and human-made art must be distinguishable—they are not. Indistinguishability creates an asymmetry in information. This leads to a ‘lemons problem’—that is, a market erosion of good-quality products (in this scenario, human-made products). Against that background, this paper proposes a solution in light of international law and rules of origin. This paper argues that the lemons problem induces the need for a rule of origin labelling work as either human-made or machine-enabled. Determining human or machine authorship may be dauntingly complex when the artwork owes its existence to both humans and machines. One solution may be to review how the country of origin is identified whenever products are not created in a single location and then to apply, mutatis mutandis, to rules of authorship origin the solutions once identified in the context of geographical origins, that is, the so-called ‘substantial transformation test’. In the context of machine-enabled artwork, this test is whether a human edited the machine output and, if so, whether those edits constituted a substantial transformation of the work of art.
After successive rounds of tariff reductions by GATT/WTO members, non‐tariff measures (NTMs) have increasingly become the focal point of multilateral trade negotiations. It remains an open question whether the liberalization in tariff rates has subsequently been weakened or even erased by increases in NTMs. Using a product‐level global panel of WTO members over the period 1996–2019, this paper systematically examines the empirical link between various tariff measures and the imposition of NTMs. I find that bound or applied tariff reductions do not correlate much on their own with NTM incidence. The relevant trade policy margin for detecting a tariff–NTM nexus is instead tariff overhangs, the difference between WTO members' bound and applied tariff rates. Countries impose more NTMs when their sectoral applied tariffs are close to their respective bound rates, indicating that small tariff overhangs signal limited legal trade policy flexibility. Mesures non tarifaires : quel est le rapport avec les tarifs douaniers? Aprè des rondes successives de réductions des tarifs douaniers par les membres du GATT/OMC, les mesures non tarifaires (MNT) sont de plus en plus devenues le point de mire des négociations commerciales multilatérales. La question à savoir si la libéralisation des taux tarifaires a subséquemment été affaiblie ou même annulée par les hausses des MNT demeure ouverte. À l'aide d'un panel mondial de produits de membres de l'OMC entre 1996 et 2019, l'article examine systématiquement le lien empirique entre diverses mesures tarifaires et l'imposition de MNT. Je constate que les réductions tarifaires consolidées ou appliquées ne sont pas beaucoup corrélées de façon individuelle à l'incidence des MNT. La marge pertinente de la politique commerciale pour détecter un lien entre les tarifs douaniers et les MNT est plutôt une dilution tarifaire, soit la différence entre les taux tarifaires consolidés et appliqués des membres de l'OMC. Les pays imposent davantage de MNT lorsque leurs tarifs douaniers sectoriels appliqués sont près de leurs taux consolidés respectifs, indiquant que de petites dilutions tarifaires signalent une flexibilité limitée de la politique commerciale sur le plan juridique.
Free Trade Agreements (FTAs) usually come with restrictions on the use of intermediate inputs in order for final goods to qualify for free trade. I focus on Rules of Origin (RoO), which limit expenses on nonmember country's intermediate inputs. In a three‐country FTA formation game, I introduce international trade in intermediate inputs and RoO restrictions. In the case of symmetric countries, I show that as countries become more involved in global supply chains, measured by their input shares in foreign final goods production, global free trade is less likely to be a stable equilibrium outcome. Free riding is the main problem preventing countries from liberalising trade. Countries are better off being nonmembers of FTAs between the other two countries relative to global free trade. Rules of Origin can solve this problem by limiting the benefits countries get from other countries' free trade agreements. In the case of asymmetric countries, an additional incentive exists for the smaller country not to join: such a country gives up more than it gains from joining an FTA for a sufficiently high degree of asymmetry in country sizes. I show that global free trade is a stable Nash equilibrium under a larger region of asymmetric country parameter space in the case of RoO than without it. Therefore, it is shown that RoO is essential in order to attain global free trade.
Under Fast-Track Authority (FT), the US Congress commits to an up-or-down vote without amendments for any trade agreement presented for ratification. We interpret FT in terms of a hold-up problem. If the US negotiates an agreement with a smaller economy, businesses there may make sunk investments for the US market. At the ratification stage, the partner economy will be locked in to the US in a way it was not previously and Congress can make changes adverse to the partner, so to convince the partner to negotiate, it must first commit not to amend the agreement. FT is then Pareto-improving.
This paper aims at shedding light on the extent to which the Agadir Association agreement has fostered inter regional trade between the EU_26 and the Agadir_4. It analyzes the remarkable variation in the spatial/sectoral structure of exports, and the extent to which it has been induced by the Agadir agreement itself or due to the adoption of RoO PANEURO diagonal cumulative scheme. The dataset covers a timeframe from [2000 - 2014] designed to account for sector specific final and intermediate exports through a bilateral gravity model and through tbe Poisson Pseudo Maximum Likelihood Estimator PPML. The methodological approach is considered to be a two-fold one which starts by screening final export and intermediate flows through conducting a ‘Hierarchal Cluster Analysis’. Second step proceeds by exposing the export flows of the 3 clusters to treatment with diagonal RoO through ‘The Double Differences Approach’ DID benchmarked to equally comparable control groups. Across all scenarios applied a remarkable significance of the interaction term combining both treatment effects and time, for the coefficients of 11 out of the 13 sectors were detected and it further asserted that treatment with diagonal RoO contributed to increasing intra-Agadir’s_4 final and intermediate exports and exports to E.U._26.
Danas smo u međunarodnoj trgovini svedoci značajne liberalizacije režima među-narodne trgovine koji se ogleda u snižavanju carinskih stopa i necarinskih barijera. Prefe-rencijalna trgovina nije moguća bez primene pravila o poreklu proizvoda, kojima se dokazuje nacionalnost jednog proizvoda i omogućava korišćenje tih trgovinskih preferencijala. Ipak, zahtevna i složena pravila o poreklu mogu biti prepreka odvijanju međunarodne trgo-vine. Zbog sve većeg značaja globalnih proizvodnih lanaca u međunarodnoj trgovini, pristu-pa se liberalizaciji režima pravila o poreklu proizvoda, kroz različite oblike omogućavanja kumulacije porekla proizvoda. Najbolji primer je PEM konvencija u Evropi koja stvara veli-ku pan-euromediteransku zonu kumulacije porekla.
Ključne reči: pravila o poreklu, međunarodna trgovina, liberalizacija režima među-narodne trgovine, kumulacija porekla proizvoda
With the help of a political economy model, we show that the extent of ‘trade policy substitution’—namely, substitution of tariffs with non-tariff measures (NTMs)—depends on the cost differential between domestic and foreign firms in complying with product standards. The model suggests the prevalence of trade policy substitution in developed economies, where the costs of compliance are relatively low. We test and validate this prediction using a database on NTMs that identifies actual trade restrictions. We further examine the possible protectionist use of trade policy substitution exploiting information on the end of the Multifibre Arrangement (MFA) and on WTO notifications.
Indonesia has been known to have abundant natural resources and culture-based creative industries. The country is therefore vulnerable to the practice of fraud of origin. One of many industrial sectors susceptible to thatparticular crime is the wooden furniture businesses. In many cases, it is apparent that natural products and raw materials of Indonesia are being exported without listing the country as the place of origin. The most commonIndonesian material falls within this illegal practice are timber products. In the province of Central Java, Jepara has been a prominent center of timber industry producing high quality timber products and wooden raw materials.From a unique standpoint, the timber industry in Jepara is deeply rooted to the culture and identity of the natives, making the attempt to separate the discussion between timber industry and the people of Jepara not only imprudent but virtually impossible. By looking at the statistic in which Jepara’s public education level is assessed to be still below the national standard, and as well bearing to the general fact that the timber actors in Jepara are more focused on product sales rather than important technical aspects such as certification of origin, it should be projected that crimes such as fraud of origin could be easily committed in Jepara. This study is using a comparative advantage theory and theories or models of H-O to investigate how the practice of fraud of origin in Jepara occurs and how to resolve such problem.
This study considers the role of the cost uncertainty associated with meeting the rules of origin (ROO) in a free trade area/agreement (FTA). While the literature tends to overlook the cost uncertainties of ROO compliers, we show that the uncertain production costs resulting from meeting the ROO yield the coexistence of compliers and non-compliers in symmetric oligopoly firms. We also show that the regime in which compliers and non-compliers coexist is not the best one for an FTA importer, while it may be the best one for world welfare. We also discuss the case that uncertain production costs are firm-specific.
Using a simple three-country model of international duopoly, this study analyzes the optimal choice of rules of origin (ROO) in a free trade area/agreement (FTA) when firms from outside the FTA must undertake foreign direct investment (FDI) in FTA countries and conduct part of their production process within the FTA to comply with the ROO. FDI causes spillovers of the superior production technology from a non-FTA firm to its competitor within the FTA, depending on how much of the production process is shifted to the FTA area. In this situation, this study predicts that as the degree of multilateral trade liberalization before formation of the FTA is higher, the optimal ROO tends to be less stringent.
Introduction The proliferation of regional trade agreements (RTAs) around the world has focused policy attention to preferential rules of origin (ROOs). The concerns voiced over ROOs are two-fold: restrictiveness and divergence. Restrictive ROOs can introduce undue barriers to trade between RTA members and non-members, thus dampening RTAs' trade-creating potential. Divergences in ROOs across regimes can increase the transaction costs for countries and companies dealing on two or more RTA fronts simultaneously, especially when they are unable to cumulate production and inputs across agreements. These two issues are intricately linked: divergence matters more when ROOs are binding – i.e. when restrictiveness is consequential for economic decisions and affects firms' production. Non-binding ROOs around the world would obliterate the importance of divergence. The purpose of this chapter is to analyse the restrictiveness and divergence in ROOs around the world, and to propose concrete ways for reducing them. In particular, we (1) discuss the costs of restrictiveness and divergence on global trade and investment flows and companies' supply chain strategies; (2) strive to quantify the extent of restrictiveness in and divergences among some fifty-eight ROOs regimes around the world (which contain a total of seventy-four sets of product-specific rules, listed in Appendix A); and (3) put forth a number of policy options – including multilateralizing ROOs at the global level, inducing convergence of ROO regimes in the main world regions, and some combination of the two – so as to facilitate trade and efficient production around the world.
Section 1: Introduction Supachai Panitchpakdi Section 2: New Trade Strategies in the Americas. The Past 20 years of Trade Policy: What Have We Learned so far and What are the Lessons for Latin America? Michael Hart. New Trade Strategies in the Americas Sherry Stephenson. The FTAA-WTO Divide: The Political Economy of Low Ambition Mario A. Marconini. Trade Liberalization as a Moral Imperative Richard Fisher Section 3: Regional and Sub-regional Agreements in the Western Hemisphere. NAFTA Regionalism in North America: NAFTA and the Mexican Case Victor Lopez Villafane and Mariana Rangel Padilla. CACM Central America in a Free Trade Area for the Americas Alberto Trejos. MERCOSUR MERCOSUR and US: No Finishing Date Felipe Frydman. Caribbean: The Caribbean Community - Integration among Small States Anneke Jessen. Other Trends in Latin American Integration: An Overview Osvaldo Rosales, Jose E. Duran Lima, Sebastian Saez Section 4: Results of North American and Hemispheric Trade Negotiations. Does the FTAA Have a Future? Jeffrey Schott. Competing for the US Import Market: NAFTA and Non-NAFTA Countries Jorge Chami Batista. Beyond FTAs: Deepening North American Integration Wendy Dobson Section 5: Interaction of Regional and Global Trade Agreements. Interactions of Regional and Global Trade Agreements Sylvia Ostry. Interactions between Regional and Global Trade Agreements Gary Hufbauer. Cleaning up the Spaghetti Bowl John Curtis. Isolation, Intervention, and Exchange Rights: Principles in Trade Theory Earl Grinols Section 6: Afterword Joseph McKinney, H. Stephen Gardner
'This is a valuable contribution in a crowded field. Kawai and Wignaraja have gone beyond familiar arguments about the relative merits of regionalism and multilateralism to ask businesses what it all means to them. Policymakers should take note.' © Asian Development Bank and Asian Development Bank Institute 2011. All rights reserved.
This article examines the hypothesis that preferential rules of origin have a protectionist character. Aimed at this, the analytical capacity of the two variables ignored by the standard argument is substantiated: a) the wage and its predominance in the explanation of the replacement of suppliers of labor-intensive products; and b) the administrative cost caused by the superimposition of rules of origin. In each case the extensions are formalized and their theoretical consequences marked out.
We examine the optimal rules of origin (ROO) in a free trade area/agreement (FTA) by employing a stylized three-country partial equilibrium model of an international duopoly. We incorporate compliance costs of the ROO into the model. In particular, compliance costs are higher for a firm located in a non-member country of the FTA than for a firm (an internal firm) located in an FTA member country, whereas marginal production costs are lower for the former. The FTA member countries set the optimal level of ROO to maximize their joint welfare. An importing country within the FTA imposes tariffs on imports that do not comply with the ROO. We show that the optimal ROO may have a protectionist bias in the sense that they are set for only the internal firm to comply. ROO may also cause low utilization of FTAs when they are set such that even the internal firm does not comply with them. These cases arise depending on parameter values.
The impact of rules of origin (RoOs) in limiting the ability of developing countries to benefit from preferential trade agreements
(PTAs) has been highlighted in the literature. One of the few US trade agreements that deviate permanently from the restrictive
‘yarn forward’ RoOs in textile and garments is the qualifying industrial zone (QIZ) agreement with Egypt and Jordan and the
subsequent Free Trade Agreement (FTA) with Jordan. The more flexible RoOs of these agreements have contributed to a dramatic
increase in exports especially from Jordan. Examining this through the lenses of global value chains (GVCs), this paper argues
that these RoOs facilitated the integration of the two locations, particularly Jordan, in the highly contingent transient
GVCs of Asian producers raising questions about the developmental impacts of such integration.
This paper examines differences in welfare implications between a free trade area (FTA) and a customs union (CU) for member countries differing in their market sizes. In a stylized three-country model of trade under oligopoly, we take into account the conditions that FTA members set external tariffs to induce their exporting firms to comply with Rules of Origin (ROO) within the trade bloc. This approach rules out trade deflection and regime switches in forming an effective FTA. The key findings are as follows. (i) Unless the difference in market size is too large and ROO are too restrictive, an FTA can be welfare-improving to countries with market size differential. (ii) The formation of a preferential trade agreement (either an FTA or a CU) is more likely to emerge between countries of similar market size. However, forming a CU allows for a greater degree of market size asymmetry than forming an FTA. (iii) Compared to the pre-PTA equilibrium, the greater reductions in external tariffs under an FTA than under a CU remain valid even for the case with market size asymmetry and preferential ROO. As such, a non-member country is relatively better off under an FTA. (iv) World welfare is higher under an FTA than under a CU when the market size asymmetry is moderate and ROO are less restrictive.
Preferential rules of origin (RoO) have emerged as the key arbitrator of global commerce with the proliferation of preferential trading arrangements (PTAs) around the world. This paper pioneers in capturing the trade effects of RoO. A 155-country gravity model yields four main results. First, PTAs with restrictive RoO discourage aggregate trade flows. Second, regime-wide RoO that allow for flexibility in the application of product-specific RoO facilitate trade. Third, restrictive RoO in final goods encourage trade in intermediate goods. Fourth, the negative effects of stringent product-specific RoO dissipate over time. The findings add much-needed nuance to the intensifying debate on the effects of PTAs to the global trading system. (JEL F01, F02, F13, F14, F15) Preferential trading agreements (PTAs) have proliferated spectacularly around the world over the past decade to govern more than a third of global commerce. 1 A central component of the burgeoning PTA universe is rules of origin (RoO). RoO define the processes to be performed and/or inputs to be incorporated in the final product that has to arise within the PTA area in order for the good to qualify for PTA-conferred preferential tariff treatment. The justification for RoO * Integration and Regional Programs Department, Inter-American Development Bank. 1 PTAs include free trade agreements, customs unions, common markets, and single markets. Some 250 PTAs had been notified to the World Trade Organization (WTO) by the end of 2002; of these, 130 were notified after January 1995 (WTO 2003). The number of PTAs is expected to soar to nearly 300 by the end of 2005.
For over four decades, the United States of America made from the unilateral trade preferences an important part of their foreign economic policy. Indeed, trade preferences give access, without reciprocity, to U.S. market for certain goods from developing countries such as the Caribbean basin, free of customs duty or reduced rates lower than those obtained with the clause “Most Favored Nation (MFN)”.
The Caribbean Basin benefits from these trade preferences through the CBI program (Caribbean Basin Initiative) or CBERA (Caribbean Basin Economic Recovery Act) launched in 1983 and expanded in 1990 to other products with some additional reductions of tariffs. In 2000, the United States launched the CBTPA (Caribbean Basin Trade Partnership Act) as an extension of CBERA with recognition of the importance of Caribbean apparel exports by applying preferential treatment. It would be appropriate to study the evolution of these policies applied to the apparel industry and the economic impact of this evolution on the Caribbean Basin.
Since 1994, the United States signed some of free trade agreements (FTAs) as the NAFTA (North American Free Trade Agreement) and the CAFTA-DR (Dominican Republic - Central America - United States Free Trade Agreement), marking an important change in their trade policy and raising the issue of countries that still have unilateral preferential agreements.
The purpose of this paper is to examine the determinants and terms of trade between the Caribbean and the United States. First, by analyzing the evolution of this trade, then by describing the rule of origin applied by the United States imports from the Caribbean region and finally by studying the effects and prospects of the bilateral trade.
The objective of this article is to explore the opportunities for growth, diversification and competition present in trade between Colombia and Turkey, as well as those specific ones that would result from a free trade agreement. Five indicators are calculated to characterize trade and trade policy. Disaggregated data from 2010 is used to conduct partial equilibrium simulations yielding estimates on trade, welfare and income effects. The results show that a tariff reduction would result in a trade increase of 3.7% during the first year, mostly reflected in Colombian imports of textiles and exports of bananas. There would also be net trade creation effects, and trade diversion would affect the European Union, the United States and Ecuador. Turkish and Colombian consumers would gain in terms of welfare and Turkish tax revenues would fall more than those of Colombia.
In this article we analyze the economic effects associated with preferential Rules of Origin (RoO) in a free trade area (FTA). By presenting a stylized three-country model of trade under oligopoly, we show that there exists a maximum limit of RoO below which forming an FTA is welfare-improving. In examining external tariff reductions under FTA, we take into account the constrained conditions that optimal tariffs set by member countries effectively induce the intrabloc exporters to comply with RoO. This approach rules out trade regime switches and helps identify the economic determinants of establishing an effective and welfare-improving FTA with RoO. We further examine whether an FTA with RoO increases total trade or whether the extra trade arises at the expense of nonmembers. Our simple model has implications for economic factors that foster or impede regional economic integration under imperfect completion.
The purpose of this paper is to examine the extent of liberalisation in RTAs in the Americas in comparison to agreements in other world regions, and to put forth policy recommendations for multilateralising the regional RTAs. While primarily focusing on market access in goods-and tariff liberalisation schedules, in particular-we also explore the regional RTAs' employment of rules of origin, investment, and services provisions. While the analysis centres on the depth of liberalisation accomplished by the region's RTAs, we preliminarily investigate the extent to which the regional RTAs feature "open regionalism"-liberalisation vis-à-vis third parties.
The key element of the EU's free trade and preferential trade agreements is the extent to which they deliver improved market access and thus contribute to the EU's foreign policy objectives towards developing countries and neighbouring countries in Europe, including the countries of the Balkans. The previous preferential trade schemes have been ineffective in delivering improved access to the EU market. The main reason for this is probably very restrictive rules of origin that the EU imposes, coupled with the costs of proving consistency with these rules. If the EU wants the 'Everything but Arms' agreement and free trade agreements with countries in the Balkans to generate substantial improvements in access to the EU market for products from these countries, then it will have to reconsider the current rules of origin and implement less restrictive rules backed upon by a careful safeguards policy. Governments apply rules to distinguish between foreign and domestic products and to define the foreign origin of a product where some imports receive preferential treatment. The purpose of this paper is to focus on the issue of the rules of origin, and on the "cummulation" of such rules within the EU preferential trade agreements. It does this, firstly, through detailing rules of origin, secondly, by providing a conceptual discussion of the impact of (the cummulation of) rules of origin, and thirdly, by exploring characteristics of preferential trade agreements.
The objective of this paper is to use a computable general equilibrium (CGE) methodology to estimate the economic gains, for both Canada and Mexico, of: (1) adopting a North American customs union (CU) that would also liberalise rules of origin (ROO); and (2) reviving the WTO scenario of multilateral free trade, thereby eliminating preferential commerce and thus the need for preferential ROO across free trade agreements (FTAs). Such a CGE methodology is useful as the approach permits computation of an efficiency (or ex post) cost of ROO that might, in some contexts, be more relevant than the existing ex ante indices of ROO restrictiveness, which are unable to account for the fact that the use of preferential access in an FTA (and the concomitant ROO compliance) is an option, not an obligation. The paper shows that the erosion of NAFTA tariff preferences at the end of the 1990s and early 2000s, which resulted from a different phasing of the NAFTA and Uruguay Round measures, has reduced the efficiency cost of NAFTA ROO, making these rules economically less relevant, especially for Canada, and therefore limiting somewhat the gains from liberalising them through a CU. Given this, the WTO scenario of multilateral free trade remains the approach that would deliver the largest economic gains in terms of GDP and welfare, while making preferential commerce and ROO obsolete.
In recent years the European Union has sought to transform its trading regime with the ACP countries by advocating reciprocal free trade agreements with them through Economic Partnership Agreements (EPAs). This policy shift from preferential trade to free trade would imply drastic changes for Senegal’s economy, which currently enjoys relatively good access to European markets, but also to the US while applying a high domestic protection on all sources of imports. As a result, this type of reform would result in improved access to foreign markets only for the EU. Furthermore, the EPA implies a loss of tariff revenues from liberalization. Putting differently, this kind of reform could lead to trade diversion in Senegal and will not create much trade. Using the MIRAGE computable general equilibrium model the study examines the potential impact of Economic Partnership Agreements on ACP countries with a special focus on Senegal.
JEL Classification : F13, F14, F15.
This paper quantifies the distortions from specific tariffs levied by the EU. The most-favored-nation (MFN) specific tariffs
levied by the EU translate into higher tariff barriers for poor countries exporting low price goods. We show that for poor
countries, these higher tariff barriers from specific tariffs offset the gains from preferential tariffs. We apply a two-stage
analysis to show that the specific tariffs levied by the EU on its agricultural imports wash away more than half of the welfare
benefits enjoyed by the Sub-Saharan African countries from EU preferential tariffs. Our results provide the first quantitative
estimate of the distortions associated with specific tariffs.
Until the advent of the North American Free Trade Agreement (NAFTA), analyses of preferential trading arrangements began by assuming a customs union (CU) with a common external tariff, and the differences between customs unions and free trade agreements (FTAs) have been little analyzed. This paper points to some of the differences between FTAs and customs unions, and shows that on welfare grounds a customs union is always Pareto-superior to an FTA. Moreover, the political economy of FTAs will lead to more opposition to further multilateral trade liberalization than will customs unions.
This paper focuses on the effects of rules of origin in Free Trade Areas. We first point out that even rules of origin which are not restrictive, namely those which do not raise costs of production, have very pronounced effects on trade and investment flows. We then look at some different ways of specifying rules of origin (ROOs) under perfect competition. We compare price and cost based ROOs and show that even if they are equivalent in the 'long run', they are not equivalent in the short run where capacity constraints can exist. We also show that some kinds of ROOs can be ranked in terms of their implications for producer profits. We also show that welfare is likely to be non monotonic in the restrictiveness of the ROO, so that making a ROO more stringent could raise welfare. Finally, we show that in the presence of imperfect competition, ROOs may raise output and reduce prices as they become more stringent.
In oligopolistic situations, content protection can have unexpected effects as it changes the nature of interactions between
input suppliers. With a duopoly, it does so in a manner that makes the foreign firm wish to match price increases and decreases
of the domestic firm. Domestic input suppliers can therefore lose from such policies, even when set at free trade levels. The relation between input demands, the form of protection, and the
degree of substitution between inputs is shown to define the effects of content protection and to provide the basis for understanding
who might lobby for protection in different environments.
We consider home country tariff and subsidy policies in a setting where a home firm is partially dependent on a foreign vertically integrated firm for supplies of a key input. The firms are Cournot competitors in the home market for the final product. We show that a tariff on final product imports may cause the foreign vertically integrated firm to reduce the price charged for the input under circumstances where a simple monopoly supplier of the input would increase its price. Supply conditions for the input significantly affect whether imports of the input should be taxed or subsidized.
This paper considers the operation of a local content requirement in a duopsony between domestic and foreign firms and demonstrates its consequences for the domestic producer of a final good. It is shown that content protection may have perverse effects on a foreign firm's profits and may be welfare-improving overall, shifting profits from the domestic firm to both the foreign firm and domestic input producers.
We develop and implement a collocation method to solve for an equilibrium in the dynamic legislative bargaining game of Duggan and Kalandrakis (2008). We formulate the collocation equations in a quasi-discrete version of the model, and we show that the collocation equations are locally Lipchitz continuous and directionally differentiable. In numerical experiments, we successfully implement a globally convergent variant of Broyden's method on a preconditioned version of the collocation equations, and the method economizes on computation cost by more than 50% compared to the value iteration method. We rely on a continuity property of the equilibrium set to obtain increasingly precise approximations of solutions to the continuum model. We showcase these techniques with an illustration of the dynamic core convergence theorem of Duggan and Kalandrakis (2008) in a nine-player, two-dimensional model with negative quadratic preferences.
This paper investigates the resource reallocation effected by content protection and content preference schemes under alternative
assumptions regarding the definition of domestic content, the number of intermediate goods, and the market structure of the
domestic intermediate good industry. Content protection is shown to be equivalent to a combination of more familiar commercial
policies. However, the extent of application of these policies is determined endogenously by parameters of the production
functions for intermediate and final goods. A number of anomalous and undesirable outcomes that may result from content protection
and content preference are discussed.
Economic Effects of Rules of Origin. — Rules of origin exist because governments wish to discriminate amongst products on
the basis of their “country of origin”. Since the components and activities that make up the total value added of many products
are not created in a single location, rules to define a unique geographical source for products must be somewhat arbitrary,
and inevitably introduce distortions into production and trade patterns as producers seek to provide their products with the
most favourable origin. This paper considers the structure of such rules and their economic consequences.
The author considers local content requirements in a second-best environment with foreign capital flows and explores the consequences for domestic producers of final goods. The author derives an expression for the welfare consequences of content protection in a competitive general equilibrium model of two stages of production and shows that content protection initially has no effect other than expanding foreign firms at the expense of domestic ones. Once domestic producers exit, further tightening of the content requirement decreases production of the final good and increases component production, stimulating an inflow of foreign capital. Conflicting effects on domestic welfare are discussed. Copyright 1993 by Royal Economic Society.
In this paper it is argued that there is an important protectionist bias inherent in free trade agreements which is not present in custom unions. In any customs union or free trade agreement, one of the critical issues concerns "rules of origin." In a free trade agreement rules of origin have an important function because, without one, each imported commodity would enter through the country with the lowest tariff on each commodity. The criterion for duty-free treatment is important in determining the economic effects of the rule of origin. It is shown that rules of origin in fact extend the protection accorded by each country to producers in other free trade agreement member countries. As such, rules of origin can constitute a source of bias toward economic inefficiency in free trade agreements in a way they cannot do with customs unions.
In a model that allows smooth substitution between domestic and imported inputs, content protection distorts inout choice but does not force a divergence between price and unit production cost. Content protection biases gains intechnical efficiency away from those saving domestic input and toward those saving imported input. By increasing derived demand for the domestic input,a marginally effective content requirement benefits suppliers of this input. Increases in the content requirement above the marginally effective level increase such benefits to suppliers of the domestic input provided that the price elasticity of demand for the final product is less than a critical value. The consequences of content protection are not materially affected by monopoly in the domestic final product market or monopsony in the domestic input market unless such monopoly or monopsony are created by content protection. The situation of a monopolistic supplier of the domestic input is enhanced by content protection.
We study a Free Trade Area with Rules of Origin and show that there are two distinct regimes. Comparative statics results for the two regimes are exact opposites and a regime switch occurs when ROO become restrictive enough. Consequently, imports into the FTA of the intermediate good first fall and then rise while the opposite pattern occurs for imports of the final good and for the price of the domestic input. We also show that tighter ROO have opposite effects on the well-being of final versus intermediate good producers and producers inside versus outside the FTA. JEL classification: F13, F15.
Comportement de l’entreprise et accès au marché dans une zone de libre échange où existent des règles d’origine. Les auteurs examinent une zone de libre échange (LE) où existent des règles d’origine (RO) et montrent qu’il existe deux régimes distincts. Les résultats en statique comparative sont exactement l’inverse dans l’un et l’autre régime, et il y a renversement quand les RO deviennent suffisamment restrictives. En conséquence, les importations dans la zone de LE du bien intermédiaire chutent d’abord et puis croissent, alors qu’on observe le pattern inverse pour les importations du bien fini et pour le prix de l’intrant de l’intérieur. On montre aussi que des RO plus restrictives ont des effets opposés sur le bien-être des producteurs de biens intermédiaires et de biens finis, et sur celui des producteurs à l’intérieur et à l’extérieur de la zone de LE.
A country's export sector may encompass a raw material, as well as a final commodity that processes that raw material. A general equilibrium model is developed in a competitive setting to analyze a nation's optimal strategy in restricting raw materials exports when allowance is made for potential beneficial effects on the export price of processed goods. When faced with a foreign tariff on exports of the processed commodity, a country's optimal response could entail an easing of raw materials export constraints instead of retaliation. Illustrations are provided of the 1986 American tariff on Canadian exports of cedar shakes and shingles.
Within the framework of a duopolistic model, we investigate the impact of foreign investment standards on welfare, output, and employment. Minimum local content and export requirements reduce world output, world welfare, and the source country's welfare. Under certain conditions, the decline in host country's consumer surplus resulting from diminished competition outweighs the shift of monopoly rent from the source country's firm to the host country's firm. Minimum content standards can increase host country's employment, but only to a point. Marginal increases in the content requirement can actually reduce employment as the magnitude of foreign investment declines. /// Analyse des normes de performance pour les investissements directs en provenance de l'étranger. Les auteurs utilisent un modèle de duopole pour analyser l'impact de différentes normes de performance pour les investissements étrangers sur les niveaux de bien-être, de production, et d'emploi. Imposer un contenu local minimum ou des obligations d'exportation tend à réduire la production mondiale, le bien-être mondial, et le niveau de bien-être dans le pays exportateur de capital. Dans certains cas, la chute dans le surplus du consommateur pour le pays qui reçoit l'investissement (à cause de la concurrence moins grande) peut être plus grande que le gain de la rente de monopole par la firme du pays récipiendaire au détriment de la firme du pays exportateur de capital. Les normes imposant un contenu local minimum peuvent accroître le niveau d'emploi dans le pays récipiendaire de l'investissement étranger mais seulement jusqu'à un certain point. Des accroissements à la marge dans le contenu local requis peuvent en fait réduire l'emploi à proportion que l'investissement étranger décroît.
International differences in the cost of production of a key intermediate product can mean that a domestic firm is dependent
on supplies from a foreign vertically integrated firm. This paper considers the incentives for the foreign firm and foreign
country to supply the domestic firm when the firms compete in a Cournot or Bertrand market for the final product. The vertical
supply decision is significantly affected by domestic supply conditions for the input and a domestic tariff on final product
imports. Optimal policy by the exporting country may require a tax on both exports, or a subsidy on both exports.
This paper analyses trade in manuf acutured goods that are produced via a vertical production structure with many stages,
where some value is added at each to an intermediate product to yield a good-in-process ready for the next stage. We consider
the stage at which a good is traded to be an economically endogenous variable, with comparative advantage determining the
pattern of production specialization by stages across countries. We study how endowment changes and policy shifts move the
margin of comparative advantage, which thus provides a channel for resource allocation adjustment that is additional to the
usual ones of factor substitution and changes in the quantity of output.
This paper compares the relative efficiency of local content schemes and tariffs as alternative means of achieving certain non-economic/distributional objectives. The efficiency comparison is made under the alternative assumptions that an intermediate good/component is produced (a) competitively and (b) by a single firm. The paper shows how the ranking of tariffs and content schemes (i) is sensitive to these assumptions and (ii) depends on the local content ratio and the elasticity of demand for components. The possible implications of vertical integration in the production process and rent/revenue seeking behaviour are also considered insofar as they affect the ranking of policies.
The Theory of Domestic Content Protection and Content PreferenceFirm Behaviour and Market Access in a Free Trade Area with Rules of Origin” NBER Working Paper NoContent protection and oligopolistic interactions
- G M Grossman
- J Ju
- K Krishna
Grossman, G. M. (1981) “The Theory of Domestic Content Protection and Content Preference” Quarterly Journal of Economics 96, 583-603 Ju, J. and K. Krishna (1998) “Firm Behaviour and Market Access in a Free Trade Area with Rules of Origin” NBER Working Paper No. 6857 Krishna, K. and M. Itoh (1986) “Content protection and oligopolistic interactions” Review of Economic Studies LV, 107-125
Firm Behaviour and Market Access in a Free Trade Area with Rules of Origin NBER Working Paper No. 6857, 1998. 21 In a monopolized market, the exporter minimizes total (and average) costs, but an ROO may reduce marginal costs
- J Ju
- K Krishna Falvey And Reed Krishna
- M Itoh
Ju, J., and K. Krishna, ''Firm Behaviour and Market Access in a Free Trade Area with Rules of Origin,'' NBER Working Paper No. 6857, 1998. 21 In a monopolized market, the exporter minimizes total (and average) costs, but an ROO may reduce marginal costs. FALVEY AND REED Krishna, K., and M. Itoh, ''Content Protection and Oligopolistic Interactions,'' Review of Economic Studies LV (1986), 107–25.
Rules of Origin in International Trade: A Comparative Study
- P Waer
- J Bourgeois
—— –––, P. Waer, and J. Bourgeois, eds., Rules of Origin in International Trade: A Comparative Study (Ann Arbor: The University of Michigan Press, 1994).
Rules of Origin as Commercial Policy Instruments EPRU Working PaperEconomic Effects of Rules of Origin
- R E Falvey
- G V Reed
Falvey, R. E., and G. V. Reed, ''Rules of Origin as Commercial Policy Instruments,'' EPRU Working Paper 1997-20, Copenhagen Business School, 1997. —— –––, and —— –––, ''Economic Effects of Rules of Origin,'' Weltwirtschaftliches Archiv 134 (1998), 209–29.
Rules of Origin in International Trade: A Comparative Study The University of Michigan Press Content protection and tariffs under monopoly and competition
- E Vermulst
Vermulst, E. A. P. Waer and J. Bourgeois (eds) (1994) Rules of Origin in International
Trade: A Comparative Study The University of Michigan Press, Ann Arbor
Vousden, N. (1987) " Content protection and tariffs under monopoly and competition "
Journal of International Economics, 23, 263-282.
Rules of Origin as Commercial Policy Instruments ''EPRU Working Paper
- R E Falvey
- V Andg